5)

Blanchard Company manufactures a single product that sells for $140 per unit and whose total variable costs are $112 per unit. The companys annual fixed costs are $623,000. The sales manager predicts that annual sales of the companys product will soon reach 39,300 units and its price will increase to $193 per unit. According to the production manager, the variable costs are expected to increase to $133 per unit but fixed costs will remain at $623,000. The income tax rate is 30%. What amounts of pretax and after-tax income can the company expect to earnfrom these predicted changes?

Prepare a forecasted contribution margin income statement.